XML 24 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
SEGMENT INFORMATION
 3 Months Ended
Sep. 26, 2018
Segment Reporting [Abstract]  
Segment Reporting Our operating segments are Chili’s and Maggiano’s. The Chili’s segment includes the results of our company-owned Chili’s restaurants in the United States and Canada as well as the results from our domestic and international franchise business. The Maggiano’s segment includes the results of our company-owned Maggiano’s restaurants.
Company sales include revenues generated by the operation of company-owned restaurants including gift card redemptions. Franchise and other revenues includes Royalties, Advertising fees, and Franchise fees and other revenues which contains development fees, franchise fees, banquet service charge income, gift card breakage and related discounts, digital entertainment revenue, Chili’s retail food product royalties and delivery fee income. We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are predominantly in the United States. There were no material transactions amongst our operating segments.
Effective the first quarter of fiscal 2019, we transitioned to ASC 606, from the previous Legacy GAAP guidance. Our Consolidated Financial Statements for the first quarter of fiscal 2019 reflect the application of ASC 606 guidance using the modified retrospective transition method, while our Consolidated Financial Statements for prior periods were prepared under Legacy GAAP. Please see Note 2 - Revenue Recognition for more details on the adoption of ASC 606.
Our chief operating decision maker uses operating income as the measure for assessing performance of our segments. Operating income includes revenues and expenses directly attributable to segment-level results of operations. Company restaurant expenses include food and beverage costs, restaurant labor costs and restaurant expenses, including advertising. The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:
 
Thirteen Week Period Ended September 26, 2018
 
ASC 606
 
Chili’s
 
Maggiano’s
 
Other
 
Consolidated
Company sales
$
640.3

 
$
88.0

 
$
—

 
$
728.3

Royalties
12.9

 
—

 
—

 
12.9

Advertising fees
5.1

 
—

 
—

 
5.1

Franchise fees and other revenues
3.5

 
4.0

 
—

 
7.5

Total revenues
661.8

 
92.0

 
—

 
753.8

 
 
 
 
 
 
 
 
Company restaurant expenses (1)
563.1

 
83.9

 
0.2

 
647.2

Depreciation and amortization
30.5

 
4.0

 
2.5

 
37.0

General and administrative
8.8

 
1.7

 
23.3

 
33.8

Other gains and charges (2)
(12.3
)
 
—

 
1.2

 
(11.1
)
Total operating costs and expenses
590.1

 
89.6

 
27.2

 
706.9

 
 
 
 
 
 
 
 
Operating income (loss)
71.7

 
2.4

 
(27.2
)
 
46.9

Interest expense
1.0

 
0.1

 
14.5

 
15.6

Other, net
—

 
—

 
(0.8
)
 
(0.8
)
Income (loss) before provision for income taxes
$
70.7

 
$
2.3

 
$
(40.9
)
 
$
32.1

 
 
 
 
 
 
 
 
Segment assets (2)
$
1,002.8

 
$
149.4

 
$
91.8

 
$
1,244.0

Segment goodwill
125.6

 
38.4

 
—

 
164.0

Payments for property and equipment
22.7

 
3.2

 
5.3

 
31.2


 
Thirteen Week Period Ended September 27, 2017
 
Legacy GAAP
 
Chili’s
 
Maggiano’s
 
Other
 
Consolidated
Company sales
$
627.6

 
$
89.3

 
$
—

 
$
716.9

Franchise and other revenues
18.3

 
4.2

 
—

 
22.5

Total revenues
645.9

 
93.5

 
—

 
739.4

 
 
 
 
 
 
 
 
Company restaurant expenses(1)
541.4

 
85.3

 
0.1

 
626.8

Depreciation and amortization
31.8

 
4.0

 
2.7

 
38.5

General and administrative
9.6

 
1.3

 
21.4

 
32.3

Other gains and charges
12.1

 
(0.2
)
 
1.3

 
13.2

Total operating costs and expenses
594.9

 
90.4

 
25.5

 
710.8

 
 
 
 
 
 
 
 
Operating income (loss)
51.0

 
3.1

 
(25.5
)
 
28.6

Interest expense
—

 
—

 
13.9

 
13.9

Other, net
—

 
—

 
(0.5
)
 
(0.5
)
Income (loss) before provision for income taxes
$
51.0

 
$
3.1

 
$
(38.9
)
 
$
15.2

 
 
 
 
 
 
 
 
Equity method investment (3)
$
10.5

 
$
—

 
$
—

 
$
10.5

Payments for property and equipment
$
18.6

 
$
2.4

 
$
1.4

 
$
22.4


(1) 
Company restaurant expenses include Cost of sales, Restaurant labor, and Restaurant expenses including advertising. With the adoption of ASC 606, for the thirteen week period ended September 26, 2018 advertising contributions received from Chili’s franchisees are recorded as Advertising fees within Total revenues, which differs from the thirteen week period ended September 27, 2017 that includes Chili’s franchise advertising contributions recorded on a net basis within Company restaurant expenses.
(2) 
During the thirteen week period ended September 26, 2018 we completed sale leaseback transactions of 141 company-owned Chili’s restaurant properties. As part of this transaction, we sold the related restaurant fixed assets totaling $166.6 million, net of accumulated depreciation. Additionally, Chili’s recognized $20.1 million of gain on the sale, including a certain portion of the deferred gain, as well as transaction related costs incurred totaling $6.8 million in Other (gains) and charges on Consolidated Statements of Comprehensive Income. Please see Note 3 - Sale Leaseback Transactions for further details.
(3) 
During the second quarter of fiscal 2018, we sold our equity interest in the Mexico joint venture.